Internode prepares off-net migration to iiNet

DSLAM death knell premature.

Internode has pushed ahead with plans to move 15,000 customers off Telstra or Optus infrastructure onto DSL equipment operated by iiNet "within weeks".

The migration, expected to result in savings of up to $7 million annually from next year, has been marked as the highest customer-facing priority for Internode managing director Simon Hackett since the Adelaide-based service provider was acquired by iiNet for $105 million in December.

Both companies have continued to tout the merged DSLAM networks as one of the biggest benefits to customers from the acquisition.

It will allow increased capacity in areas where both operate DSL equipment and fill DSL blackspots where Internode or iiNet do not currently have a presence.

Internode customers are likely to see the biggest benefit as the company added 244 exchanges to its DSLAM network, covering areas where it did not previously have its own infrastructure.

Hackett said migration of approximately 15,000 customers away from Telstra and Optus-run infrastructure would begin this quarter.

"It's going very smoothly because Internode was already set up for multiple wholesale access so we're really just adding one more quiver to the bow, it works really well," he said.

Hackett warned customers earlier this month that the transfer process would not be instant due to high volumes.

"There are rate limits in terms of the pace at which Telstra can implement the appropriate bulk migrations around the country," he said on the Whirlpool user forum.

"Customers who have been on Telstra or Optus ports for less than 12 months may not get migrated until the 12-month point."

The migration off Telstra and Optus ports will likely benefit metropolitan and some regional customers. However, some customers are ineligible for migration, meaning it is unlikely that Internode will cut all DSL wholesale ties with Telstra.

Other Telstra services might be retained as Internode and iiNet consider savings from the competition watchdog's recent decision to declare DSL wholesale pricing.

However, neither company was willing to speculate what type of savings would be achieved from the interim or final pricing determinations from the ACCC.

DSLAM builds still coming

The acquisition is expected to boost the chance of Internode and iiNet building out new DSLAMs into regional areas as the combined customer base provides greater incentives to move customers onto the companies' combined networks.

Hackett said the switch-on of DSLAMs in four Northern Territory exchanges last month off the back of the Federal Government's $250 million national backhaul blackspots scheme would be the last time the companies duplicated DSL infrastructure.

"You should fully expect to see future builds for the group being done obviously as one group," he said.

Though fewer service providers have lined up to install infrastructure in Telstra exchanges in recent months, iiNet managing director Michael Malone was quick to dispel notions that the company was cutting back on DSLAM expansion.

He said the two-year payback on on-net infrastructure and eight-year rollout of the National Broadband Network in some areas would likely prove enough to continue investment in DSL.

"If we can find places where it's commercially viable to do so and we can get backhaul for it, we'll continue to do it," he said.